Most analysts expect the depressed economy to persist at least through the end of this year, providing "a favorable environment for expanded mortgage fraud activity," the report said. "Industry personnel will feel pressure to find alternative methods to match the income they enjoyed during the real estate boom years," it said. "Many will be willing to conduct criminal activities to achieve this goal. Increasing numbers of individuals will be willing to consider and participate in illicit deals to avoid foreclosure." Actions taken to fight the mortgage crisis also create new fraud opportunities, such as scams directed at people looking to buy foreclosed properties and federal funds earmarked for the mortgage industry, the FBI said. The report noted that the rise in Federal Housing Administration loans from 3 percent of the nation's mortgages in 2006 to more than 30 percent this year also has increased FHA fraud. Last year, 9,278 FHA loans defaulted without borrowers making a single payment -- nearly three times the 2007 total. Three major types of fraud are builder-bailout, short-sale and foreclosure-rescue schemes. Builder-bailout schemes are where builders offer excessive buyer incentives that they do not disclose on the mortgage loan documents, meaning the reported purchase price does not accurately represent what the buyer paid. In short-sale schemes, fraudsters get straw buyers to purchase a home and then go into default. The scammers then offer to buy the home in a short sale, where the lender agrees to accept less than the amount owed. Foreclosure rescue schemes involve scammers offering to save owners from foreclosure for a fee. In some cases, the scammers have the owners sign over the home and collect rent while letting the home go into default or steal equity by taking out a second mortgage or selling the home. Here are some fraud types the FBI cited as "emerging schemes." •
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Reverse mortgages: Fraudsters get straw buyers to buy foreclosed, distressed or abandoned homes and then transfer title to seniors they recruit. The seniors then take out lump-sum reverse mortgages based on inflated appraisals. Credit enhancement schemes: Loan officers and builders encourage borrowers to have their names added to the bank accounts of friends or family members temporarily to falsely show that they have sufficient deposits on hand to afford a mortgage. Some even deposit money into applicants' accounts until they qualify for a mortgage, then withdraw the funds and use them for the next buyer. Bankruptcy foreclosure rescue: Scammers tell owners to start sending monthly payments to them while filing for bankruptcy in the owners' names, but often without their knowledge. The bankruptcy filing automatically stays foreclosure,